Why are values so important in Family Businesses?

In Family Businesses values are more often than not the glue that holds everything together. Values form the strong foundations upon which successful Family Businesses are based, they bring cohesion, can be used to resolve conflicts and are often the pull for bringing in external senior expertise, together with the attraction for then retaining those senior non-family members long term.

In previous blogs, I have talked about the unique mind-set Family Businesses have, where quite often the only measure of success is handing the Family Business over to the next generation in a better state than the current generation inherited it. As a result, the mindset is not one of being a “business owner” but instead a “temporary custodian” of the Family Business. Values play a major role in this mindset helping develop the business and social entrepreneurship, aligning family values and in the philanthropic roles Family Businesses often play in their local communities where they often have deep and emotional roots.

Often parents instil positive values similar to their own values in their children, however, the leaders in Family Businesses work even harder to ensure values are transferred down the generations. Primarily, since those values are the foundations upon which the success of the Family Business has been built, and are essential to the economic success and management of the Family Business whilst providing safeguards and stability to both the family and business dynamics at play.

Attracting Other Senior Staff

Increasingly, Family Businesses are turning to external expertise at a senior level in relation to key management roles historically occupied by family members. This brings in fresh blood, a fresh perspective and above all relevant commercial experience. These senior non-family employees can add significant value and stability as the Family Business is transitioned across generations. However, Family Businesses often struggle to attract and retain those senior non-family employees given there will be no (or very little) possibility of equity which drives the perception that there is the proverbial “glass ceiling” between senior non-family employees and the family members.

However, the way to attract, and more importantly retain, those senior non-family employees is a mixture of providing sufficient rewards to attract them in the first place and then providing them with a supportive environment. This, in turn, focuses on painting a picture of the future underpinned by a positive attitude to change, without fear of failure from trying something new, and it is this latter aspect where strongly embedded family values can play a significant role.

Spending time on identifying clear values is often a worthwhile exercise for any Family Business, however, identifying the values is only the first stage. The next stage once those values have been identified is to communicate and embed those values in the culture of the Family Business and the behaviour of everyone from the boardroom to the shop floor who all need to understand and act in accordance with those values in everything they do.

Experts in Family Business

Gorvins Solicitors has a number of specialist lawyers who can assist you in planning and protecting your business. To consult one of our experts, give us a call on 0161 930 5117 or send an email to enquiries@gorvins.com.

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